A few days ago Valero Energy agreed to pony up $730 million to acquire Chevron’s Pembroke refinery in Wales, as well as a broad range of inventory, marketing, and related logistics assets located across the UK and Ireland (valued at another $1 billion). One of Europe’s largest integrated refineries, the Pembroke facility has a throughput capacity of 270,000 barrels per day (220,000 barrels per day of crude). In addition, the deal also includes stakes in four major product pipelines and 11 fuel terminals, a 14,000 barrels-per-day aviation fuels business, and more than 1,000 Texaco-branded wholesale gas stations (the UK’s #1 branded dealer network).
Valero, like many of its peers, has been shedding some of its under performing refining and marketing operations in order to redirect its capital into profitable refinery and marketing assets elsewhere. (In 2010 Valero exited its refining operations on the US East Coast.) The Pembroke refinery deal offers significant long-term value for the company’s shareholders, according to Valero chairman and CEO Bill Klesse. In other words, the price was right.
Of particular note is that even while the refining industry suffered during the 2009 global recession, which hammered commodity prices, the Pembroke refinery remained profitable and cash-flow positive.
What does Chevron get out of selling these assets? Well, cash, obviously. But strategically the company is restructuring its own refining and marketing business to focus on where it believes it is most competitive: North America and the Asia-Pacific region. Since 2010, the company has agreed to sell downstream assets (mostly fuels marketing businesses) in more than 20 other countries, mainly in the Caribbean and southern Africa.
So the two refining and marketing giants find that their mutual restructuring programs intersect quite nicely in the refinery asset sitting on the Welsh coast.
Seller meets buyer for a mutually advantageous result.
A refined business deal.
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Picture by Nick Hubbard, used under a CC-Share Alike license.

Refining and marketing petroleum company Valero Energy Corporation (VLO) announced that the company expects earnings to be in a range of $2.20 to $2.40 per share for the fourth quarter (4Q) of fiscal year 2013 (FY13). This guidance includes an extraordinary gain of $325 million, or $0.60 per share, related to the disposal of Valero’s stake in its retail spinoff, CST Brands, Inc. (CST) in November of last year.

Valero Energy Corp has secured U.S. government permission to ship U.S. crude oil to Canada, joining other companies seeking to do the same in light of rising output.
Chief Executive Bill Klesse told analysts last week that Valero has the required license from the U.S. Commerce Department to ship Texas crude from Corpus Christi to its refinery in Quebec City, and aims to do so this summer.

Valero Energy Corp has secured U.S. government permission to ship U.S. crude oil to Canada, joining other companies seeking to do the same in light of rising output.
Chief Executive Bill Klesse told analysts last week that Valero has the required license from the U.S. Commerce Department to ship Texas crude from Corpus Christi to its refinery in Quebec City, and aims to do so this summer.

By Investing Crunch:Valero Energy (NYSE:VLO) is the largest independent refiner in the United States. Valero produces transportation fuels, petrochemical products and power. Valero owns 16 petroleum refineries with a combined throughput of over 2.9 million barrels per day. The company is also one of the largest renewable fuel produces.

CALGARY – Alberta is pumping billions into a plan to send oil to Canada’s eastern provinces. And it will pay hundreds of thousands of dollars more in annual fees to support a domestic refinery.
The apparent mismatch of a free-market touting province with deep Conservative roots underwriting energy infrastructure has emerged as international scrutiny and political wrangling sideline pipelines and competition makes upgrading bitumen into refinery-ready oil uneconomic.

Michael Filloon submits: Valero (VLO) is the world's largest independent refiner. It is comprised of 14 refineries and 2.6 million barrels per day of throughput capacity. The average throughput capacity per refinery is 185000 barrels per day. Its 5800 branded market sites is one of nation's largest fuel retailers. Valero is also one of the nation's largest ethanol companies.